What to Expect From Group Coverage After Health Reform

Over the past few months, several health insurance giants have warned consumers and brokers of the premium rate increases to come with the onset of health reform in 2014. However, this aspect of the Affordable Care Act only applies to individual coverage and not employer-sponsored plans.

As much of the law focuses on individual and small group market changes, those receiving coverage from their employer may not get hit quite as hard by this so-called rate shock, if it does occur. Staying on your group plan is at least a way to ensure a normal rate increase from one year to the next.

Although the large group market (over 100 employees) will not change quite as drastically as the private individual market, there are still noteworthy adjustments to be aware of. The main concern for workers has been that their employers may cut back on full-time employees in order to avoid paying for healthcare.

According to the new law, employers are required to cover a wider range of services than previously, which many companies have feared will cause bankruptcy. Thus far, lifetime limits have been removed, annual benefit maximums have been limited (and will be removed as of 2014), dependent coverage has extended to age 26, and additional taxes have been added for employees on Medicare and medical devices.

Employer Mandate & Options for Workers

In 2014, businesses with more than 50 full-time employees will be charged a $2,000 per employee fee for not providing health insurance when an employee receives a subsidy through their state insurance exchange, the new marketplace for coverage. Even those who do provide coverage to workers will pay the lesser of $2,000 for every full-time worker who enrolls in the exchange and is eligible for tax credits.

Employers can also offer workers vouchers to participate in the state exchange in an amount equivalent to their largest percentage contribution on their own health plans. This way, employees will be able to choose whether they want to dip their toes in the government-run pool or remain on a privatized health plan.

If you work for a company with more than 200 employees that provides healthcare benefits, you are guaranteed coverage, as the law requires businesses with these criteria to automatically enroll workers. In the event that you do not want this sort of coverage as an employee, you have the right to opt out, however.

Affordable Care – Or Not?

Though employers are required to offer coverage to their full-time workers and their spouses and dependents, they will not be penalized if they do not provide affordable healthcare options for families. Therefore, employees may be able to pay for their own plans, but not afford to insure their family members, as well.

While these laws seem to be designed with insurance exchange recruitment in mind, employees may not see as drastic a premium increase as individual plan members. As long as you have coverage of some sort, you will not be required to pay the individual mandate tax, and your rates may adjust depending on the sort of policy your employer provides.

And as a last resort, if you find your group plan to be suddenly out of your price range because of the nation’s newly acquired financial stresses due to health reform, an exchange can help you avoid tax penalties and being uninsured.